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April 18, 2000
IBM Tops List of 100 Best Corporate Citizens
In a survey by Business Ethics magazine, some corporations shine in their commitment to diverse
stakeholders.
SocialFunds.com --
Corporate success is no longer measured only by financial return to shareholders, but by a much
broader measure that includes shareholders, employees, customers, and community. A new survey from
Business Ethics magazine ranks public companies based on their relationship to all four groups of
stakeholders.
 Business Ethics, the Minneapolis-based publication
devoted to corporate responsibility, recently released its new list of the "100 Best Corporate
Citizens." The top five companies, IBM, Hewlett Packard, Intel, Procter & Gamble, and Herman
Miller, highlight the creative approaches many companies are taking to enlightened corporate
citizenship.
"The significance of this report is that we're reframing the meaning of
success for corporations," said Marjorie Kelly, Editor and Publisher of Business Ethics. "We're
saying that success is measured in how you serve all four groups of stakeholders."
Corporate citizenship is not just about popularity among stakeholders, but has many emergent
effects on future financial success as well. Among the benefits good corporate citizens enjoy are
attracting the best employees, winning deep-seated customer loyalty, minimizing lawsuits and
environmental clean-up costs, and possibly lowering the cost of capital.
Business Ethics
produced a similar report in 1996, but it is hard to compare the two years' results because their
methods have changed significantly. Instead of relying only on information collected from the
companies themselves, as in '96, this year they used social performance information supplied by
Kinder, Lydenberg, Domini & Co. (KLD), a leading social investment research firm based in
Cambridge, Mass.
"If a company failed to respond to our queries last time, they got bumped
from the list," said Kelly. "There were some unfortunate omissions. IBM was bumped, but is number
one this year."
IBM was virtually alone in serving three stakeholder groups well:
stockholders, community, and employees. Hewlett-Packard excelled in serving two groups, which was
more typical of the top-listed companies. No companies on the list excelled in serving all
stakeholder groups, although the top 25 performed at least average in serving all four.
The data from KLD ranked each company's service to stakeholders on a scale ranging from 1, a
"major concern," to 5, a "major strength," with 3 being neutral. Shareholder service was measured
using the average total return to shareholders for the years 1996-98, which for IBM was an
impressive 61.39 percent.
Novel approaches to citizenship employed by the top companies
include employee involvement, community service, innovative benefits, and team-based product
development. Intel, for example, offers eight weeks sabbatical for every seven years of employment.
Hewlett Packard focuses its charitable efforts on four minority communities, where it works on
developing the math and science skills of students at every level.
The message of Business
Ethics' new "100 Best" list is a positive one for social investors, supporting the growing evidence
of the financial corollaries of social performance. "Our study shows that financial success and
stakeholder service can go hand-in-hand," said Kelly.
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SRI World Group, Inc. All Rights Reserved.
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